He may have sold off his prized flagship Los Angeles Times — the cornerstone of his latest transformation strategy — but the publishing wheeler-dealer already has his top team consumed with finding new deals.

That deal-making appears to be traveling on two tracks. One involves newspapers — their purchase and consolidation. The other lays rail for a digital-only content business expansion. And then, there’s the seemingly wild-eyed Ferro dream: buy Gannett, a company reeling again, its stock price down more than 10 percent Tuesday after announcing dismal fourth-quarter and full-year 2018 financials.

Some observers have looked at the incoming half billion dollars and marveled at Tronc’s new spending power. But the real amount is more modest.

How much cash would it have to spend? Figure that the company may have $250 million or more in cash, post-transaction. By the terms of much of its debt, it must use the proceeds of such an asset sale to pay that off. Tronc will use the bulk of Soon-Shiong’s cash to pay off its approximately $360 million in debt, the company said in a release. Then it must pay taxes on its profit. Currently, Tronc shows about $185 million in cash on its books.

Right now, Ferro’s top team — made up of Tronc CEO Justin Dearborn, CFO Terry Jimenez, and just-re-anointed Tribune Interactive CEO Ross Levinsohn — is actively pursuing the acquisition of several digital-only publishers, confidential sources confirm. On the heels of announcing a majority investment in BestReviews.com, the Tronc execs are actively eying one high-profile business site and looking at several other potential buys.

Meanwhile, on a seemingly parallel course, Tronc is aiming to be the high bidder for Cox Media Group’s Palm Beach Post. Cox placed the Post and its Austin American-Statesman on the market four months ago.

Expect the announcement of the Austin buyer soon; the Post’s sale will take longer. The Austin transaction, though, gives us some indication of what Tronc might face in its effort to win the Post.

GateHouse close to buying the Austin American-Statesman

GateHouse Media looks to be the winner of the Statesman, as final details of the transaction are completed this week.

This GateHouse acquisition would follow on the heels of its surprise loss of the Boston Herald, which it had expected to win out of bankruptcy court last week. Instead, Digital First Media, with a winning $12 million bid, won Boston’s second paper. Just a week earlier, GateHouse did add another significant daily — the Baker family-held Eugene Register-Guard — to its stable of more than 130 dailies. )

GateHouse appears to have made certain it would be the top bidder for the Statesman, a paper with 79,000 Sunday print circulation and 51,000 daily. The paper has sold only about 3,000 digital-only subscriptions despite the city’s status as a growing tech hub. Update, Feb. 23: The Statesman disputes this number, and it all comes down to how you choose to count digital subscriptions. Click here if you want a fuller explanation.

The paper’s last quarterly publisher’s statement issued through the Alliance for Audited Media, for the third quarter of 2017, shows about 3,000 digital, non-replica subscribers and about 6,500 Monday–Saturday digital non-replica subscribers. In addition, it shows 22,000 digital replica subscribers. Usually, in my reporting of such data, I report the non-replica number — that’s the number most used by publishers to indicate their non-print paid circulation. According to Sylvia Rodriguez, the Statesman’s senior director of audience: “We have 16,786 digital-only subscribers under that plan (who, like print subscribers, might be at different rates depending on when they came in).”

She added: “AAM doesn’t include a category for that, attempting to break things out by replica and non-replica, and not necessarily subscription, but also usage. Even though some (maybe most) of those subscribers are using both our ePaper and our premium website (and some of our print subscribers are also using all of those things) we try to assign paid volume and usage based on how they access products the most,” says Sylvia Rodriguez, senior director of audience.

I asked Rodriguez to explain the difference between the 22,000 digital replica number and the 16,786, “digital-only” number. “AAMs number includes both paid/usage,” she said. “For example, one paid subscriber can add an additional four users to their account. That’s the difference.”

GateHouse could pay close to $50 million for it, almost 5× the paper’s annual earnings — a higher multiple than what’s typical in the newspaper market.

Most in the industry had expected Hearst Newspapers — itself on the hunt for new properties to buy, though judiciously — to emerge as a winner for the Statesman. With its seven dailies in Texas, including the Houston Chronicle and San Antonio Express-News, an Austin buy could offer significant synergies, both in journalism and in business. Hearst, though, bid closer to the industry standard of a 4× multiple, sources say. Why?

In short, Hearst tends to invest more in journalism than GateHouse — witness its reinvestment in Connecticut — and thus believes only the lower bid is financially justifiable.

GateHouse, Cox, and Hearst each declined comment on the sale.

South Florida dominance comes into view

Tronc, meanwhile, is focused on South Florida.

That stretch of coast from Port St. Lucie down to Miami has exploded in population over the last several decades. Frozen Northerners have dethawed there as Latin American migrants have moved up. Now, almost 7 million people make up what is the eighth-largest market in the U.S.

As people poured in, South Florida became a journalistic hotbed. In the early go-go days, Tribune, Knight Ridder, and Cox journalists went head-to-head, telling one great story after another in what had become the country’s third-largest state.

Newspapers’ declining business fortunes have taken their toll, but the region remains highly competitive. McClatchy’s Miami Herald works the southern end of the region. Immediately north, Tronc’s (Fort Lauderdale) Sun-Sentinel plies the major Broward County-plus population area, pushing into the territory of the Cox-owned Palm Beach Post. Then, further north, two Gannett dailies dominate.

One savvy newspaper hand sums up several decades of competition: The Palm Beach Post “screwed up big time in the late ’70s and ’80s by mostly going north and stopped the south push about Boynton Beach, if that. They allowed the Sun-Sentinel to gobble up all that area, which they needed, because there was no growth south of Fort Lauderdale. But that area is now coming around as South Beach moves north.”

All in all, South Florida has remained an area of unusual newspaper competition — at least for now.

It’s Tronc and Gannett that have emerged as the two likeliest buyers for the Palm Beach Post, each able to target synergistic efficiencies in combination with their current papers. But surprise buyers could emerge. Consider the geographic context: Palm Beach is at least occasionally home to more than 30 billionaires (of 2,042 globally) on Forbes’ list. Even if you take one prominent media critic off the potential buyer list, you’ve still got 29, including at least three Brothers Koch. Given the new game of billionaire bingo playing out in the newspaper business, one of them could well emerge — ahead of both Tronc and Gannett — as the top bidder.

Both Tronc and Gannett declined to comment on their interest in buying the Post.

If either Gannett or Tronc win, the scope of consolidation may grow. Tronc has already considered buying a local broadcast TV station. The idea: amplify its expanded franchise, as the FCC’s elimination of cross-ownership rules allow new newspaper/broadcast combinations.

Beyond that, even greater newspaper consolidation could be in play. McClatchy appears to be neither a buyer nor a seller in the near term, but Tronc and Gannett could well push further mergers of operations. Either company could buy out the other’s south Florida property. That would create a regional newspaper behemoth, along a 150-mile stretch from Melbourne on the north through Ft. Lauderdale.

Such a strategy certainly fits with the dominant newspaper strategy of the day: consolidation of properties to reduce costs. GateHouse’s megaclustering model serves as the apotheosis of this model.

The next Tronc intrigues

To expand that thought: Could Gannett and Tronc swap multiple properties elsewhere in the country? For instance, could Tronc take over Gannett’s Milwaukee Journal-Sentinel in order to combine some operations with its Chicago Tribune?

Even further intrigue: As recently as last week, Michael Ferro has told associates that he wants to buy Gannett, sources tell me. That’s a threat/promise he made two years ago, when Gannett mounted an ultimately unsuccessful hostile bid for Tronc.

Now, with the L.A. Times sale, Tronc’s overall financials have improved. Its market capitalization of roughly $670 million has remained sky-high, at a multiple of about 7× its earnings, despite the coming Times sale.

One big question is how long that investor confidence will remain in place, as a more capricious stock market considers the year-end financials the company will release Feb. 28.

One big Tronc doubter, one with longstanding financial acumen, assesses the value of the company this way: “Its market cap ignores any taxes on sale of assets, loss of cars.com cash flow, and continued deterioration of the business. Plus some of Tronc EBITDA is garbage (what multiple would you put on a contract to print the [Chicago] Sun-Times?) and the cost of Levinsohn, [Lewis] D’Vorkin, and Ferro’s bonuses, etc. So what’s the real 2018 number you’re buying?” That’s one school of thought — that Tronc stock will fall back to Earth, based more on traditional metrics and less on Ferro’s magic-making money spinning. They’d point to Gannett’s fall from investor grace as a foreshadow.

On Tuesday, investors took one look at Gannett’s latest financials and headed south, sending it already-in-the-doldrums share price down. In one day, it lost $120 million in market value; we’ll have to see how it recovers, as investors increasingly doubt its strategy. Ferro may see in that downturn an opportunity to pounce.

There’s no doubt that Gannett’s fortunes have turned sluggish since its ill-fated Tronc-buying foray of 2016. Still, Tronc’s own balance sheet — even after the L.A. Times sale — doesn’t suggest it has the wherewithal to make such a purchase.

Further, Gannett’s market cap remains almost double that of Tronc’s. Its potential market price of $1.4 billion-plus appears beyond Ferro’s immediate reach. Could he find a willing financing partner — as he did two years ago when he brought in Soon-Shiong as a major investor?

Tronc and Gannett may soon pick up their conversations, if they haven’t already, despite the bad blood spilled in 2016. But a straight-up merger, a willing combination, seems unlikely.

Gannett CEO Bob Dickey has been quite adamant that he doesn’t want Ferro as a partner. Ferro, for his part, considers Dickey “weak” — and no doubt weaker after Gannett’s stock tumble — and talks about a strong dislike of Gannett chairman John Jeffry Louis III.

But hey, stranger things have happened.

On paper, the merger of America’s largest (Gannett) and third-largest (Tronc) local/regional news publishers could make financial sense. Out of that transaction would come a more dominant, more national daily newspaper company.

So this new edition of Ferronomics offers a number of different scenarios (though available funding would make some of them mutually exclusive):

A buy of the Palm Beach Post.

Property swaps with Gannett and/or others.

A struggle for Gannett.

Ongoing interest in buying digital-only content assets.

Or Ferro could straddle a different kind of old media.

The same guy who bought both The Daily Meal and the New York Daily News last year could have his eyes set on one of the greatest of American publishing icons.

As one financial insider assesses the market for Tronc, the “big potential one out there will be the properties Meredith will discard out of the Time Inc. deal.” That deal will likely spring loose a number of iconic, but legacy-impaired titles — think Fortune, Sports Illustrated, and Time itself. These are the kinds of titles that the legacy-brand-fancying impresario like Ferro may value highly.

On Feb. 1, Meredith officially closed on its $2.7 billion acquisition, so it, too, is now ready to make a deal. (Meredith declined comment on its sales plans.)

Ferro has talked often about reaching the magic number of 100 million in U.S. digital audience; Tronc press releases — even those announcing such relatively minor purchases as the Daily News and The Daily Meal — trumpet progress toward that goal. But losing the L.A. Times and San Diego U-T, Tronc will lose about half of what audience it’s assembled.

So it will need to bulk up fast, perhaps taking the route of buying companies in the $50 million to $200 million range. How that process proceeds may let us see what kind of company Ferro wants his oddly named Tronc to become.

On the one hand, he seems to have tired of newspaper travails, exiting the southern California newspapers with a lot of hot dollars in his pocket. He could go “digital” and exit more of the newspaper business, perhaps keeping his hometown power center, the Chicago Tribune. Or he could pursue the grand transformation of the American press, that Tronckification that’s never really become anything more than a talking point over two years.

Why did Ferro sell the L.A. Times?

As Tronc watchers ponder the company’s next moves, it’s a good question to ask one more time: Why did Ferro sell the Times? The answer may tell us something about where he goes next.

As I laid out four potential reasons, the issue of union-organizing pressure emerged as a key. As veteran entertainment editor Janice Min noted this week in discussing why she rejected the possibility of the L.A. Times’ editorship last summer, “I think one of the things that was interesting to me is they were terrified of their newsroom,” she said. “They clearly didn’t want to interact with them.” (Min’s name is now back in play as a potential Times editor-in-chief, as Soon-Shiong and his people plumb the possibilities.)

In fact, the Times’ sale was more just than a visceral decision. Tronc had consulted with labor law firms about how to deal with a unionizing Times newsroom, several sources say. That strategizing also included how far it could go, and how useful it would be, to set up a parallel L.A.-based newsroom. (I detailed the nascent development, and the ensuing staff suspicion it stoked, of that network — briefly named the Los Angeles Times Network — last month.)

After gathering that legal advice, Tronc concluded that the unionized Times newsroom would create too great an obstacle to putting its new syndication strategy in place. Changed job descriptions, layoffs, and new work requirements would all be subject to News Guild bargaining. That turned out to be a key driver in Ferro’s turn-about sale to Soon-Shiong.

That sale was agreed to within a week of the sales offer, forsaking the usual due diligence and bargaining that such transactions usually entail. $500 million, plus U-T pension liabilities, Tronc told Soon-Shiong, sources say, holding out the possibility that a couple of other bidders were ready to pounce. Observers doubt Ferro had other buyers lined up — but he got his deal done, quickly.

The Tronc work-around network may be the subject of future dispute, I’m told. More than one of those hired to work for the Los Angeles Times Network LLC believed they were being hired by the Times itself, which officially operates as Los Angeles Times Communications LLC. Considering themselves “misled,” legal action may be in the offing, sources note. Tronc representatives declined comment on any such claims.

Clearly, Ferro’s L.A. plans took a rather abrupt U-turn, given the labor revolt he had only fed by his appointments — first of publisher Ross Levinsohn, but mainly by Levinsohn’s own appointment of editor-in-chief Lewis D’Vorkin, stingingly dubbed by the Columbia Journalism Review as L.A.’s “dark prince of journalism.”

Michael Ferro has shown himself to be a great multiplier of money, a deal-maker supreme — albeit often with deals done on the edges of normal corporate practice. If only he could multiply actual news reporting — the journalism his properties produce — as well.

Now, as Ferro faces himself in the mirror, he faces a new question: Does he really want to take on becoming the great consolidator of the American press, conquering once-mighty Gannett? Or will he exit the field — richer, but his ambitions humbled?

Chastened by the more than 5-to-1 union vote in L.A., he’s got to know that the News Guild, emboldened by victories in L.A. and elsewhere, will be surely be gunning for him in Tronc cities far and wide.